LB 

.Si 5 



DEPARTMENT OF THE INTERIOR 

V^.?i, BUREAU OF EDUCATION 



BULLETIN. 1923. No. 47 



A BIENNIAL SURVEY OF 

PUBLIC SCHOOL FINANCE IN THE 

UNITED STATES, 1920-1922 



By 



FLETCHER HARPER SWIFT 

PROFESSOR OF EDUCATION. COLLEGE OF EDUCATION 
UNIVERSITY OF MINNESOTA 



[ Advance Sheets from the Biennial Survey of Education 
in the United States, 1920-1922] 




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1923 



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A BIENNIAL SURVEY OF PUBLIC SCHOOL FINANCE IN 
THE UNITED STATES, 1920-1922. 

By Fletcher Habpeb Swift. 



Contents. — Educational developments following the great wars — Growth of school 
costs— Building expenditures>— FederaJ policies in public-school finance— State policies 
in public school flnancer— A new conception of State aid— Reforms in apportioning 
State school funds. — Need of new sources of revenue — Declining importance of State 
endowments — New sources of State school revenue — Tendencies in local support, county 
and district — The present situation. 



Every great war in which the United States has played a part 
has been followed by educational developments of supreme national 
importance. As the result of the Revolutionary War the Federal 
Government acquired a vast public land domain from which it has 
made generous grants to the States carved out therefrom, and which 
became the foundation of systems of free public schools in no less 
than 30 of our States. The constitutions drafted by one State after 
another following the Civil War are eloquent with evidences of a 
newly created faith in public education. Although the lapse of 
more than half a century still finds educational provisions in the 
South far from adequate, the fact remains that not only in the 
South but in the North the Civil War was followed by educational 
efforts and movements amounting almost to a renaissance. 

Although the United States was engaged in the World War less 
than two years, the effects upon education resulting from this brief 
period of warfare will perhaps prove to be as far-reaching and as 
important as those growing out of any previous war. For more 
than a quarter of a century educational leaders and men interested 
in our national welfare had been attempting to awaken the United 
States to the inadequacy of its educational provisions. The Federal 
census of 1910 and many National and State reports prepared there- 
after had endeavored to awaken the intelligence and zeal of the 
citizens of the United States to the shocking extent of illiteracy, 
the failure of the States to make education universal, and the 
disasters awaiting American democracy if measures so inadequate 
were allowed to continue. But while State superintendents of schools 
spread broadcast their reports and appeals, and justified their omi- 
nous prophecies by the incontrovertible pronouncements of the Na- 
tion's greatest political thinkers from the beginning of our national 
existence to the present time/ the people, or at least a large part of 

1 



2 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

that portion of the people which controls school levies, continued 
to point to newly erected urban school buildings, raised indignant 
protests at every suggestion of increasing school rates, and pleaded 
poverty and overtaxation. 

There is little reason for thinking that affairs might not have 
continued thus indefinitely had not the World War finally extended 
its octopus clutch over the United States also. To be sure, social 
and educational leaders had labored courageously and with some suc- 
cess ; but it was not until American Army officers found it necessary 
to have their orders shouted to American privates in three, four — 
yes, and even five — languages that America awoke, awoke to the 
fact that in a country whose laws, whose very ideals were written 
in English, thousands upon thousands of adult citizens could not 
read a single word of the language of their adopted country. The 
first selective draft showed that there were 700,000 illiterates in the 
United States between 21 and 31 years of age, and that 29 per cent 
of the total number of men actually examined were physically unfit 
for military service. Worse still, thousands upon thousands of 
children were discovered to be growing up amid conditions which 
debarred them from any chance of securing even the rudiments of 
an education. 

The realization that came with this awakening was at first unde- 
fined and bewildered. Yet, although vague and confused, it was 
animate and pregnant with possibilities. It led at once to a demand 
that both the causes and the remedy be discovered. The causes were 
not difficult to determine. Indeed, as already indicated, they had 
been set forth again and again by the educational leaders of nearly 
every State in the Union. Briefly stated, they were these : Inequal- 
ities in educational opportunities, inequalities in zeal for public 
education, inequalities in taxable wealth from which school revenues 
were derived. 

Even a most cursory survey of educational conditions in 1918, 
the last year of the war, will reveal ominous inequalities not onlj^ 
among our 48 States but among the counties and districts within 
the same State. Thus, whereas the State of Montana spent in that 
year over $80 on each pupil attending school, Mississippi spent 
only $12. Again, whereas the minimum legal school year in New 
York State and in Connecticut was nine months, in Arkansas it was 
six months and in South Carolina less than six months. 

Undoubtedly the World War was the most important factor in 
awakening the American public to the inadequacy of its educational 
provisions and in arousing the States to vigorous efforts to improve 
educational conditions. However, in this connection mention should 
be made of a little volume put forth in 1918 by the Russell Sage 
Foundation, written by Leonard P. Ayres and entitled "An Index 



PUBLIC SCHOOL FINANCE. 3 

Number for State School Systems." This was one of the first at- 
tempts yet made to assign an educational rank to each of the States 
in the Union. The effect produced by this volume, particularly upon 
the States ranked low by Ayres, can probably never be measured. 
One State after another, through its governor or other public leaders, 
was aroused to the inadequacy of its educational provisions. Inves- 
tigations were demanded and made, to be followed by legislation 
providing longer school terms, increased salaries for teachers, and 
larger funds. 

It must not be thought that the post-war wave of educational 
enthusiasm and the resulting efforts at improvement were confined 
to any one group of States or to States where educational standards 
were relatively low. On the contrary, the movement has extended 
from New York to Louisiana and from Maine to Washington. The 
fundamental characteristic of this movement has been a demand for 
greatly increased educational opportunities and for the equaliza- 
tion of these opportunities as nearly as possible. The realization 
that the fulfillment of such demands would be possible only through 
the provision of greatly increased revenues led one State after an- 
other not only to provide larger funds but to endeavor to discover 
new sources of school revenue and methods and policies of school 
finance which would bring about a greater equalization than hither- 
to prevailed, both of funds and of the burdens of school costs. 

From these preliminary observations we may now turn to con- 
sider more definitely the most important events and tendencies 
affecting public school finance in the United States during the bien- 
nium 1920-1922. Our account may well begin with a consideration 
of the increase in school costs and the reasons for the same. Fol- 
lowing this we shall direct attention, first, to the trend of school 
finance policies, Federal, State, and local; second, to the results of 
these policies; third, to the present critical situation; and, fourth, 
to the outlook for the future. 

GROWTH OF SCHOOL COSTS. 

A study recently made by the research division of the National 
Education Association shows that 30 States whose aggregate total 
expenditure for all school costs (except debt service) in 1920 was 
$760,898,253 spent in the year 1921-22 $1,117,129,569, an increase of 
46.82 per cent. A similar study by the writer of the present ac- 
count, covering 11 States, 3 of which (Kansas, New Hampshire, and 
Tennessee) were not included in the National Education Association 
study, revealed an increase for the same period of approximately 46 
per cent. The total amount expended for the public schools in 
the United States in the year 1920 was $1,036,000,000. Assuming 
that the average increase in total expenditure for public schools 



4 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

in the United States from 1920 to 1922 was 46 per cent, we find 
that the estimated expenditure for all public-school costs in the 
United States, exclusive of debt service, in the year 1922 would 
amount to approximately $1,526,000,000. In the year 1870 the United 
States spent approximately $63,000,000 on public schools, and as- 
suming that in the year 1922 we spent $1,526,000,000, we have an 
increase of 2,322 per cent. 

In 1890 our total expenditure for public schools amounted to 
$141,000,000; in 1900, to $215,000,000 ; in 1910, to $426,000,000 ; and in 
1920, to $1,036,000,000. The moneys spent for public schools in 1920 
represent an increase of 36 per cent over the amount spent in 1918, 
and the estimated total expenditure in 1922 represents an increase 
of 46 per cent over 1920. These vast increases are the result of the 
interaction of many important factors— the rapid increase in school 
population, the lengthening of the school year, the placing by the 
community upon the school of a larger and larger number of func- 
tions, resulting in the introduction of many new types of studies and 
activities, and finally and, we may note, as far as the biennium 
1920-1922 is concerned, perhaps the most important cause of all, the 
increase in the cost of living and the consequent decrease in the pur- 
chasing power of the dollar. 

The first of the above causes which concerns us is the enormous 
increase in the number of children for whom the United States is 
providing public elementary and secondary education and the great 
increase in the amount spent for each school child educated at public 
expense. The fact that the population of the United States in- 
creased from approximately 63,000,000 in 1890 to 106,000,000 in 
1920 would in itself result in a great increase in the school popula- 
tion and school costs. In 1890 there were approximately 8,000,000 
children in average daily attendance upon public schools in the 
United States; in 1920 there were 16,000,000. In 1890 the average 
annual expenditure for each child in average daily attendance was 
$17; in 1920 it was $65. The per cent of increase in the total ex- 
penditure for public schools, 1890-1920, was 711. For this same 
period the number of children in average daily attendance increased 
98 per cent and the average annual expenditure per child 272 per 
cent. Let us now consider briefly some of the most important 
reasons contributing to this increase in school attendance and school 
costs other than the increase in the total population of the United 
States. 

The number of children attending public school and, consequently, 
school costs have greatly increased during the last quarter of a cen- 
tury, due to the enactment of compulsory school laws and by the ex- 



PUBLIC SCHOOL FrPTANCE. 5 

tension of the school age. In 1894—95, according to the Commissioner 
of Education, there were 19 States which had no compulsory school 
law. In 1920 there was not a single State in the Union which did 
not have included among its statutes a compulsory school law. It 
is scarcely necessary to add that the degree of effectiveness with 
which these laws have been enforced has steadily increased through- 
out the past 25 years, with the result that a larger and larger per- 
centage of children of school age has been found within the public 
schools. Not only is this true, but a comparison of the compulsory 
school age in those States which in the year 1895 had a compulsory 
school law with the compulsory school age in these same States for 
the year 1918 shows that while in New Hampshire the compulsory- 
school age had decreased two years and in New Mexico one year 
and in five States it had remained unchanged, in 18 States it had 
increased all the way from one to fotrr years. In this connection at- 
tention should be called to the fact that the length of the average 
school year in the United States increased from 130 days in 1880 to 
135 days in 1890 and 162 days in 1920. 

Another factor which has played a large part in the increase of 
school costs in the United States is the multiplication of high schools 
and an unprecedented growth of high-school attendance. How 
important these factors are can be better understood by a com- 
parison of what it costs to educate a high-school pupil with what it 
costs to educate an elementary-school pupil. In 1918 the average 
cost in the United States per elementary school pupil enrolled was 
$31.65 ; per high-school pupil enrolled, $84.48. It should be borne in 
mind that in 1918 the United States was in a period of retrenchment 
due to the World War, and although this period of retrenchment 
was by no means past in 1920, yet the expenditure per elementary 
pupil and per high-school pupil was approximately double that of 
the year 1918, being, in fact, $64.03 per elementary pupil enrolled 
and $158.21 per high-school pupil enrolled. From these facts we 
see that it costs approximately two and one-half times as much to 
educate pupils attending high schools as pupils attending elementary 
schools. These facts became of great significance in attempting to 
determine the reasons for mounting costs in education when we dis- 
cover that seven times as large a proportion of our total popu- 
lation was attending high school in 1920 as was attending high 
school in 1890. More specifically, in 1890 three-tenths of 1 per cent 
of the total population in the United States was enrolled in high 
school, whereas in 1920 2.1 per cent was enrolled. In the year 1890 
approximately 3 persons out of every 1,000 individuals in the 
United States were enrolled in high school; in 1920 21 persons out of 



6 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

every 1,000. The trend becomes even more impressive when we turn 
our consideration from the total population to that portion of it 
actually enrolled in school. In 1890, out of every 1,000 children en- 
rolled in school, only 16 were in high school; in 1920, out of every 
1,000 children enrolled, 102 were enrolled in high school. Finally, we 
discover that, whereas in 1890 the United States was spending 
$4,759,065, in 1920 her expenditure on public high schools, excluding 
all cities of less than 10,000 population, and excluding also costs of 
administration, capital outlay, and debt service, was $66,024,307. 

In considering increases in school population and school costs 
which have marked the past quarter of a century, the fact must not 
be overlooked that no less than 10 States have been admitted into 
the Union since 1888. Four of these States were admitted in the 
year 1889 and the remaining six from 1890 to 1912. The rapid 
development of these new States, their growth in population, and 
particularly the fact that they came into the Union possessed with 
marked zeal for public education and vast Federal endowments 
stimulated them to establish and maintain high standards as tO' the 
accessibility and quality of the educational facilities they provided. 

It is impossible in the present brief account to give the consider- 
ation merited by a number of other causes which, combined with 
those already mentioned, have steadily forced upward expenditures 
for public schools. Reference was made in a previous paragraph to 
the expansion of the course of study, to the development of voca- 
tional education and the establishment of continuation classes, and 
to the fact that a great number of new projects and new responsibili- 
ties have been assumed by the public schools. New conceptions of 
what our public schools must endeavor to do' for the millions of 
children who, year after year, pass in and out of their schoolrooms 
have led to an expansion of the course of study and to the attempt 
on the part of our public schools not only to provide new types of 
instruction but to provide many types of physical care almost un- 
dreamed of by the directors of public education a quarter of a century 
ago. Some of the projects well-nigh unthought of at that time but 
which the public schools of to-day are undertaking are suggested 
by the following list : School doctors, nurses, dental clinics, psycho- 
logical clinics, open-air schools, supervised play, special schools and 
classes for blind, deaf, crippled, and mentally backward or deficient 
children, truant officers, home visiting teachers, city systems of 
public kindergartens, extensive programs of physical and health 
education, free textbooks, and continuation classes for minors en- 
gaged in industry. 

To these causes must be added three others : A steady rise in the 
educational and professional qualifications demanded of public-school 



PUBLIC SCHOOL FINANCE. 7 

teachere, necessitating a steady increase in the salaries paid, and a 
similar continual rise in building and equipment standards. A final 
cause, and one which is frequently overlooked by the public, is the 
depreciation of the purchasing power of the dollar. 

In 1913 the United States spent for public schools approximately 
$522,000,000; in 1918, $763,000,000; in 1920, $1,036,000,000; and in 
1922 (estimated), $1,526,000,000. Taken by themselves, these ex- 
penditures for 1918, 1920, and 1922 indicate a vast increase over that 
of 1913, but if compared with the total expenditure for 1913 on the 
basis of the purchasing power of a dollar in these respective years, 
it will be found that in 1918 and 1920 they represent an actual de- 
crease, as the following table shows : 

Table 1. — Total expenditures for public scJiools in the United States.^ 



Year. 


Actual 
total ex- 
penditure 
(millions of 
dollars.) 

A. 


Index of 
cost of 
living. 2 

B. 


Piurchasing 
power of 
total ex- 
penditure ' 
(millions of 
dollars). 

C. 


1913 , 


522 

764 

1,036 


100 
174 
200 


522 


1918 


438 


1920 


518 







1 For all costs except debt service. 

2 Formula used in computing items in column C: C= A-v-:^. 

' Index figures taken from Nat. Educ. Assoc. Eesearch Bui., Vol. I, No. 2, p. 84. 

From Table 1 we see that the $764,000,000 spent in 1918 had the 
power to purchase only what $438,000,000 would have purchased in 
1913, and that the $1,036,000,000 spent on public schools in 1920 had 
the power to purchase only what $518,000,000 would have purchased 
in 1913. In other words, in terms of the purchasing power of 
money, the United States spent $84,000,000 less on public schools 
in 1918 than in 1913 and $4,000,000 less in 1920 than in 1913. The 
inadequacy of the expenditure in 1918 and 1920 becomes even more 
evident when we discover that there were nearly 2,000,000 more 
children in average daily attendance in the public schools of the 
United States in 1918 than in 1913 and more than 2,500,000 more 
in 1920 than in 1913. It is easy to forecast that, however much the 
actual expenditure per school child in 1918 and 1920 exceeded that 
of 1913, in actual purchasing power the expenditure per pupil must 
have been considerably less. This statement is borne out by the 
facts presented in Table 2. 
62072°— 23 2 



Table 2. 



BIEITNIAl, SURVEY OF EDUCATION, 1920-1922. 

-Decline in average annual expenditure per child as measured by 
purchasing power of the dollar, 1913-1920. 



Year. 


Index of 
cost of 
living. 


Millions of 

children in 

average 

daily 

attendance. 


Average 
annual ex- 
penditure. 


Purchasing 
power of 
average 
annual ex- 
penditure. 




Per child in average 
daily attendance. 


1913 


100 
174 
200 


13.6 
15.5 
16.2 


$38. 31 
49.12 
64.16 


38.31 


1918 


28.23 


1920 . . . 


32.08 







From Table 2 we see that although the United States spent in 1918 
one and three-tenths times as much per school child as in 1913, and 
one and seven-tenths times as much in 1920, in actual purchasing 
power she spent $10 less per child in 1918 and $6 less in 1920 than in 
1913. 

With respect to teachers' salaries the facts and conditions are in 
complete harmony with those already presented regarding total ex- 
penditure and expenditure per child. The average salary of teachers 
in the United States was $515 in 1913, $635 in 1918, and $837 in 1920. 
The purchasing power of these respective average salaries was $515 
in 1913, $365 in 1918, and $418 in 1920. (National Education Asso- 
ciation, Eesearch Bulletin, Vol. I, No. 2, March, 1923, p. 84.) 

Even a cursory consideration of the facts presented in the last few 
paragraphs will show that if the States were to make any genuine 
progress it would be necessary for them to greatly increase their 
expenditures. Before the schools could be relieved of the large 
numbers of teachers whose preparation was in many cases not only 
meager but far below the minimum legal qualifications, and before 
communities could make any headway with their disastrously retarded 
building programs, money would have to be spent in rapidly increas- 
ing sums. That this is what actually took place during the biennium 
1920 to 1922 is evident from the fact already noted that the expendi- 
ture for public schools in 1922 was 46 per cent in advance of the ex- 
penditure in 1920. Assuming as the total expenditure in the year 
1922 the sum $1,526,000,000, estimated as explained in a previous 
paragraph, we find that in 1922 the United States spent approx- 
imately $490,000,00 more on public schools than in 1920 and more 
than three times as much as was spent in 1913. From 1920 to 1922 
the index of the cost of living decreased from 200 to 170, with the 
result that $1,526,000,000 had the power of purchasing what 
$897,000,000 would have purchased in 1913. Thus we see that, 
whereas the actual purchasing power of the total amount of money 



PXJBLIC SCHOOL FINANCE. 9 

expended for public schools in 1918 and in 1920 was less than that 
expended in 1913, the purchasing power of the estimated total amount 
of expenditures on public schools in 1922 was one and seven-tenths 
times that spent in 1913. 

A study of the expenditures of 14 States for the year 1921-22 
showed that their aggregate total expenditure amounted to $536,- 
493,396. Of this total expenditure, 80.4 per cent was devoted to 
current expenses and 19.6 per cent to capital outlay, the largest item 
of which was new buildings. Contrast with this the fact that in 
1890 only 18.6 per cent of total public-school expenditures were de- 
voted to outlays ; in 1900, 16.5 per cent ; in 1910, 16.41 per cent ; and 
in 1920, 14.8 per cent. It is evident that no small part of the un- 
precedented increase in school costs during the year 1922 was due 
to greatly increased building outlays. This is a matter of sufficient 
importance to demand somewhat further consideration. 

BUILDING EXPENDITURES. 

The general building situation is set forth in the following state- 
ment from a recent bulletin issued by the Bureau of Education : 

Even before our entry into the World War there was lack of adequate school 
accommodations in the country and with the almost total stoppage of con- 
struction during the war there was by the end of 1920 a widespread want. 

This general statement might be supported by quotations from 
the official school reports of nearly every State in the Union. The 
annual report of the Maryland State Board of Education, 1920, 
page 33, contains the following significant statement : 

Building operations throughout the State were practically suspended with 
our entry into the war in 1917, and, on account of the cost of labor and 
materials, were not fully resumed during 1920, although 19 per cent of the 
total school expenditures in the counties was devoted to capital outlay or debt 
service. In normal times a school system usually devotes about 20 per cent 
of its total expenditure to building purposes, the remainder to current expenses. 

Let us take two other examples, New Hampshire and Massachu- 
setts. In 1906, 1907, and 1908 Massachusetts devoted approximately 
from 18 to something over 19 per cent of her total school expenditures 
to outlays. In 1917 the per cent had fallen to 14.36; in 1918, to 
12.9; and in 1921, to 8.9. In 1922 her expenditure for outlays con- 
tinued far below normal, being, in fact, only 9.8. New Hampshire 
devoted only 3.4 per cent of her total public school expenditures to 
building costs in 1918, 3.6 per cent in 1920, and 4.6 per cent in 1922. 
But while individual States, such as Massachusetts and New Hamp- 
shire, were still in 1920 and 1922 far behind in the per cent of their 
total expenditures devoted to building programs, from such data as 
are available it seems safe to assume that the majority of the States 



10 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

were making genuine progress in catching np with their building 
needs. Thus we find that in 1920 Florida devoted 14.8 per cent of 
her expenditures to outlays; Tennessee, 15.7 per cent; Minnesota, 

20.5 per cent; Nebraska, 13.8 per cent; Kansas, 14.3 per cent; Idaho, 
23.3 per cent ; and Nevada, 13.2 per cent. In 1922 Maryland devoted 

17.6 per cent of her total expenditures to outlays; Florida, 12.3; 
Tennessee, 12.6 ; Minnesota, 25 ; Kansas, 17.9 ; and Washington, 17.4. 
One of the greatest obstacles in the way of carrying out building pro- 
grams was the failure of many bond issues to attract buyers. This 
situation might be met by offering higher rates of interest or by sell- 
ing bonds below par. One of the most interesting and significant 
building policies inaugurated during the biennium 1920 to 1922 
was that provided for by North Carolina by an act passed March 
17, 1921. This act provided for a State bond issue of not over $5,000,- 
000, the proceeds to be used for establishing in the State treasury a 
special building fund to be loaned to county boards of education to 
aid in the erection of schoolhouses. The law provided that no loan 
shall be made for a building of less than five rooms and that plans 
for buildings must have the approval of the State superintendent of 
public instruction. 

Despite the increase in school expenditures for 1922 and the in- 
crease in the per cent of the total expenditures devoted tO' school 
buildings, the present writing finds school accommodations, taking 
the United States as a whole, far from adequate. A bulletin pre- 
pared by the Bureau of Education for American education week, 
December 3 to 9, 1922, reads, in part, as follows : 

Probably never in the history of this country has there been such need for 
school building construction as at the present time. Lacli of adequate school 
building accommodations in the period before the war and the almost total 
stoppage of all school building during the war have brought about a state of 
school-building congestion that is a menace to the health, strength, and intelli- 
gence of the children of this country. From the data that the bureau has been 
able to gather it is reasonable to assume that at least one-half the children of 
the country are housed in buildings nearly one-quarter of a century old. This 
means that more than one-half the children are housed in buildings that have 
practically none of the educational facilities of a modern school plant. Fur- 
thermore, these buildings are not fireproof, as it has been found that only 5 
per cent of the total number of buildings in cities of 8,000 and over are of fire- 
proof construction. About 10,000,000 of the 21,462,133 children in the country 
have inadequate housing facilities, and this is doubtless an underestimate. 
This means that it would be necessary to erect immediately 250,000 classrooms 
at a minimum cost of $3,000,000,000. 

This is a sum approximately three times that of the total amount 
expended for all public-school purposes in 1920. 

We have now considered two of the major aspects of public-school 
finance chax'acterizing the biennium 1920 to 1922, namely, (1) the 



PUBLIC SCHOOL FUTAKCE. 11 

increasing costs of public schools and (2) the reasons for the same. 
Let us now turn to the third aspect of the situation, namely, the 
financial policies and tendencies characterizing this period. 

FEDERAL POLICIES IN PUBLIC SCHOOL FINANCE. 

Of the policies characterizing public education in the United States 
during the past 10 years, perhaps none has attracted more universal 
attention than that of Federal aid. The Smith-Lever Act, providing 
Federal subventions for extension work in agriculture and home 
economics, was approved May 8, 1914. On February 23, 1917, the 
Smith-Hughes vocational education law was passed, which marked 
the entrance of the Federal Government upon a national policy of 
subsidizing vocational education. This law was followed by the 
Smith-Sears Act, approved June 27, 1918, and the Smith-Bankhead 
Act, June 2, 1920 ; the former provided funds for the vocational re- 
habilitation of disabled soldiers and sailors, and the latter funds for 
the vocational rehabilitation of civilians disabled in industry or 
otherwise. 

The most notable development within the field of Federal aid 
during the past biennium has been the attempt to induce the National 
Government to enter upon a policy of large Federal aid to public 
schools. This attempt found expression in 1918 in the Smith-Towner 
bill. This bill attempted to place upon the Federal Government the 
responsibility of evening out educational inequalities existing among 
the States by reason of their inequalities in financial resources, dif- 
ferences in educational history and in standards. It recognized 
that the Nation was confronted by an unprecedented or, at least, a 
heretofore unrecognized problem. It provided for the creation of 
a Federal department of education and for an annual grant from 
the Federal Government of $100,000,000 for (1) equalizing educa- 
tional opportunities, (2) reducing illiteracy, (3) Americanization 
work, (4) teachers' training, (5) physical education and recreation. 
In each case the amount furnished by the National Government was 
to be matched by the State. The Smith-Towner bill failed of 
passage and was succeeded by the Towner- Sterling bill, which at- 
tempted to embody in revised form the major aims and principles 
of the Smith-Towner bill, but which, like its predecessor, failed to 
pass. The bitter conflict waged about the Smith-Towner and the 
Towner- Sterling bills shows clearly that any attempt to inaugurate 
a policy of large Federal aid to public schools will meet bitter 
and well-organized opposition. "N'^Hiat the future has in store no 
one would venture to prophesy. If these bills have served no other 
purpose, they have at least forced the citizens of the United States 



12 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

to a realization of the national importance of education and to an 
appreciation of the fact that the educational conditions in one 
State are the concern of all. 

The most important current funds at present provided by the 
Federal Government the proceeds of which are devoted at least 
in part to public schools include the following: Per centum grants, 
Smith-Hughes subventions, Federal forest-reserve county funds, and 
moneys derived from the Federal mineral royalty grant of 1920. 
To this list may well be added Smith-Lever subventions, for although 
not a dollar of Smith-Lever money reaches the public schools, the 
work is carried on partly among children of school age. A complete 
account of these funds will be found in a bulletin recently issued 
by the Bureau of Education on Federal Aid to Public Schools 
(Bureau of Education, Bulletin, 1922, No. 47). It will therefore 
suffice at this point to give these funds only a brief consideration. 

Per centum grants, or funds, have their origin in the policy adopted 
by Congress upon the admission of Ohio into the Union in the year 
1802, of granting to public land States a certain per cent of the 
proceeds of the sales of lands belonging to the United States sold 
after the State's admission to the Union. These grants are made on 
condition that no taxes of any kind shall be levied by the State upon 
lands sold by the Federal Government for a period of five years 
after the date of the sale. Up to June 30, 1920, the United States 
had paid in aggregate to the States entitled to percentum grants no 
less than $16,792,261. 

Chapter 192 of the Acts of Congress, May 23, 1908, provides that 
hereafter 25 per cent of all moneys received from each forest reserve 
during any fiscal year shall be paid to the State or Territory in 
which said reserve is situated, to be expended as the State or Terri- 
torial legislature may prescribe for the benefit of public schools and 
public roads of the county or counties in which the forest reserve is 
situated. Twenty-nine States contain national forest reserves in 
areas varying all the way from approximately 19,000,000 acres in 
California to 18,000 acres in South Carolina. The income is de- 
rived chiefly from the sale of forest reserve timber and from fees 
paid for grazing rights. The Federal forest reserve moneys i^aid 
to the States and to Alaska amounted in 1920 to $1,180,065 ; in 1921, 
to $1,023,082; in 1922, to $846,443. The aggregate amount of 
Federal forest reserve moneys paid by the United States from 1906 
to 1922 was $11,149,092. 

During the year 1920 Congress passed an act entitled "An act to 
promote the mining of coal, phosphate, oil, oil shale, gas, and sodium 
on the public domain." This act, approved February 23, 1920, pro- 
vides that public land States in which are situated Federal lands con- 



PUBLIC SCHOOL FINANCE. IS 

taining nonmetallic mineral deposits of the classes covered by the act 
are entitled to 20 per cent for past production and to 37^ per cent 
for future production of the moneys paid to the United States as 
bonuseSy royalties, and rentals from the lease of such lands, provid- 
ing that all moneys accruing to the United States from land within 
the national petroleum reserve shall be deposited in the United States 
Treasury as miscellaneous receipts. 

The oil and mineral leasing act is of special interest in view of 
the fact that it is the most recent grant of its kind. Because of the 
nature of the grants provided, it follows that this act will affect 
only a limited number of States, and of this limited number it would 
seem probable that only a few will receive any very important in- 
come. Tlie General Land Office reports that eight States received 
grants under the terms of this act during the fiscal year 1921 and 
nine States during the year 1922. The total royalties paid during 
the fiscal year 1921 amounted to approximately $10,373,000, and 
during the year 1922 to $7,337,000. During the year 1921 the United 
States distributed $1,806,805.96 among eight States, as follows: 
California, $777,061.32; Idaho, $37.50; Louisiana, $199.58; Montana, 
$43,168.12 ; New Mexico, $78.75 ; North Dakota, $16.97 ; Utah, $300 ; 
and Wyoming, $985,943.80. It is evident that the grants paid 
to the eight States were of negligible importance except in the case 
of California, Montana, and Wyoming. California has enacted that 
the entire proceeds received by the State shall constitute a current 
fund to be known as the State junior college fund for the main- 
tenance of junior colleges, provided that any excess not required for 
this purpose shall be devoted to elementary schools. Wyoming has 
provided that 50 per cent of her quota shall be devoted to teachers' 
salaries, 10 per cent to the University of Wyoming for the construc- 
tion, equipment, and furnishing of new buildings and for repairs, 
38 per cent to the State highway conmiission for road construction, 
and 2 per cent to each county in proportion to the oil and gas pro- 
duction of the same. According to a statement in the Wyoming 
Educational Bulletin of June, 1922, the Government royalty fund 
amounted on April 30, 1922, to $1,148,000. It was estimated that 
the distribution would amount to approximately $250 per elemen- 
tary and rural school teacher and $375 per high-school teacher. 

The interest of this act lies not only in the large grants received 
under it by California and Wyoming but also in its possibilities, for, 
should nonmetallic mineral deposits of great value be discovered in 
any of the public domain, they would thus become an important 
source of revenue to the State in which they were situated. 

The passage on February 23, 1917, of the Smith-Hughes Act 
marked the entrance of the Federal Government upon an entirely 



14 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

new educational policy. By the passage of the Morrill Act the Fed- 
eral Government had begun as long as 1862 subsidizing industrial 
and agricultural work, but with the Smith-Hughes Act, " the Fed- 
eral stimulus passed from the colleges to the public schools." This 
act provides subventions for the salaries of teachers, supervisors, and 
directors of agriculture, home economics, trade and industrial sub- 
jects, and for providing professional training for teachers of these 
subjects. Two hundred thousand dollars per year is devoted to 
the support of the Federal Board of Vocational Education created 
to carry out the provisions of this act. The general provisions of 
the act are too widely known to require any statement here. The 
Smith-Hughes Act provided for an annual Federal grant increas- 
ing from a total of $1,860,000 in 1917-18 to $7,367,000 in 1925-26, 
which amount thereafter becomes a continuing annual appropriation. 
The total amount provided imder the Smith-Hughes Act in 1921 
was approximately $3,800,000 and in 1922 $4,300,000. The results 
of this act upon vocational education are, in part, suggested by the 
following facts: In 1916 only two States in the Union — ^Wisconsin 
and Pennsylvania — had compulsory part-time or continuation school 
laws; in 1922 at least 21 States had such compulsory part-time edu- 
cation laws. The enrollment in Federally aided vocational schools 
increased from 164,186 in 1917 to 323,028 in 1921. The number 
enrolled in Federally subsidized teacher-training courses increased 
from 6,589 in 1918 to 13,358 in 1921. 

In 1921 the United States provided under the Smith-Lever Act, 
$5,080,000 to be distributed as subventions among the States for the 
support of extension work in agriculture and home economics. The 
amount thus provided in 1922 was $5,580,000. As already noted, a 
portion of these moneys are available for work among children of 
public school age. 

In addition to the funds thus far described, the United States 
makes annual appropriations to provide (1) approximately one- 
half of the costs of public schools in the District of Columbia, (2) 
to maintain schools for natives in Alaska, and (3) to pay the costs 
of the education of Indians in Oklahoma attending public schools 
and of the education of Indians in Federal schools. The sum pro- 
vided by the Federal Government for the District of Columbia 
amounts to about $2,000,000 per year and the appropriations for 
schools for natives in Alaska to approximately $200,000 per year. 
In 1922 the United States paid to the public schools of Oklahoma 
$197,932 for the tuition of Indian children attending public schools 
and $372,000 for the education of Indian children in Federal schools. 

A review of the preceding paragraphs dealing with Federal aid 
will show that during the biennium 1920-22 the United States 



PUBLIC SCHOOL FINANCE. 15 

embarked upon no new policy of importance. The Smith-Towner 
and Towner-Sterling bills both represent a growing national educa- 
tional consciousness, but, as already noted, both of these bills failed 
to pass. The Federal royalty mineral grant, thus far at least, affects 
too few States to be considered of far-reaching importance. 

STATE POLICIES IN PUBLIC SCHOOL FINANCE. 

In marked contrast to the situation just described with respect to 
the Federal Government is that which we find developing among the 
States during the biennium 1920-1922. During this period one State 
after another increased its school year and the age of compulsory 
school attendance, provided for the establishment of continuation 
classes for minors engaged in industry, established Americaniza- 
tion classes, entered upon campaigns against illiteracy, and sought 
to promote on a large scale other projects. Increased aid for high 
schools, for the promotion of consolidation, for the provision of free 
textbooks, for vocational education, and for health education and 
physical recreation are among the projects which have engaged, to 
a marked degree, the attention of the States. 'No less important than 
the tendencies just listed is that of establishing a legal scale of 
minimum wages for teachers, or of raising previously established 
minima. It will be seen that these projects and these policies all 
played an important part in the marked increase in school expendi- 
tures which took place in 1922 and which has already been noted. 

Even more important than the individual undertakings and poli- 
cies just noted is the question of the general trend. Taking the 
United States as a whole, in 1890, 23.75 per cent of the total receipts 
for public schools were derived from State sources; in 1905, 19.06 
per cent; in 1920, 17 per cent. We see, then, that for the past 
three decades there has been a continual decrease in the per cent 
of total school costs furnished by the State. At present data are 
not available which will make it possible to determine whether, 
during the biennium with which the present account is concerned, 
1920-1922, taking the United States as a whole, there was any marked 
change in this general trend of the diminishing relative importance 
of the State as a provider of school revenue. This, however, may 
be said, that although in some States the per cent of total revenues 
furnished by the State has declined during the past two years, in 
others there has been a definitely adopted policy to increase State 
aid, which has resulted in placing a much larger share of the burden 
of school costs upon the State than formerly. 

It may be well to note at the outset one or two matters of im- 
portance. The first problem of public-school support is to furnish 
62072°— 23 3 



16 BIENNIAL SURVEY OF EDUCATION, 1920-1922. ^ 

adequate school revenues. Certain authorities at the present time 
are maintaining that the State ought to bear from 60 to 75 per cent 
of the total school costs. Such a condition may exist and yet the 
situation be very far from satisfactory. A number of Southern 
States have for many years drawn 50 per cent, or more than 50 
per cent, of their school revenues from State sources, but this situa- 
tion has been due to the fact that local school units have provided 
very meager funds, and consequently the total amount of revenue 
furnished was so small as to make impossible the maintenance of 
good schools. 

A second matter of importance to be considered at this point is 
that the real test of what the State is doing is to be found not 
only in the amount of money it provides from State sources but 
also in the per cent of total school revenues which it furnishes. 
Thus, Minnesota in 1916 provided from State sources approximately 
$5,035,000; in 1918, $5,041,000; in 1920, $6,382,000; in 1922, $8,849,- 
000; yet the per cent of total school expenditures provided by the 
State in these four years declined steadily, being, in fact, 23 per 
cent in 1916, 19 per cent in 1918, 16.6 per cent in 1920, and 15.7 
per cent in 1922. From this brief presentation of two fundamental 
principles, let us now turn our attention to a few individual States 
which have recently made definite efforts to increase greatly the 
State's contribution to public-school support. 

Among the States which since the close of the World War pro- 
vided for greatly increased school revenue to be furnished by the 
State are Arizona, California, Georgia, Iowa, Louisiana, Massa- 
chusetts, New York, North Carolina, Pennsylvania, South Carolina, 
Texas, Utah, Washington, and West Virginia. 

An act passed by the Arizona Legislature of 1921 provides for an 
annual levy sufficient to provide not less than $25 per pupil in aver- 
age daily attendance in common schools and high schools of the 
State as shown by the records of attendance for the preceding year. 
This provision displaces a law which provided for a levy sufficient 
to raise annually $750,000. This new law resulted in the State pro- 
viding $1,254,325 in the year 1921-22, an increase of more than 66 
per cent over the amount provided in the older law.^ 

California in 1920 adopted a constitutional amendment whereby 
the State grant per pupil in average daily attendance was increased 
from $17.50 to $30 per elementary pupil and from $15 to $30 per 
high-school pupil. In 1890 the public schools of California derived 
52 per cent of their revenues from the State; in 1920, 21 per cent. 
The constitutional amendment enacted in 1920 was a definite attempt 
to check this tendency of the State to bear a continually decreasing 

1 Bu. of Educ, Bui., 1922, No. 43, p. 11. 



PUBLIC SCHOOL, FINANCE. 17 

portion of the burden of school costs. It is estimated that had this 
amendment been in effect in 1921, the elementary schools of Califor- 
nia would have derived 36 per cent of their support from State 
funds, and secondary schools 10.7 per cent of their support from the 
State. The counties in California must raise $30 per pupil in aver- 
age daily attendance in elementary schools and $60 per pupil in 
high schools. All of the school moneys furnished by the State and 
60 per cent of the moneys raised by the county must be devoted to 
the payment of teachers' salaries. This means a State minimum 
salary of from $1,300 to $1,400 per year. 

The new school code of Georgia enacted in 1919 provided that, 
beginning with January 1, 1922, 50 per cent of all revenues received 
by the State from all sources of income or taxation shall be used and 
expended for the support and maintenance of common schools. 
Louisiana, by constitutional amendment adopted in 1920, provided 
an additional State tax of $1,000,000. In the same year New 
York increased her appropriations for teachers' salaries to the 
extent of $20,000,000. Few States in the Union show a greater tend- 
ency to recognize that the State must relieve the local school units of 
a much larger portion of the school burden than heretofore. Of the 
total revenue provided for public schools by New York, the State 
furnished 9.3 per cent in 1905 and 9.5 per cent in 1918. But in 1920 
the State furnished 12.1 per cent, and in 1921 furnished 21.9 per cent. 
North Carolina increased her State appropriations for public schools 
from approximately $750,000 in 1919 to $3,295,000 in 1920. 

Pennsylvania in 1921 passed a minimum salary law. AH school 
districts of the State are classified as first, second, third, or fourth 
class. The salary act provides salary schedules for each class of 
school district. The State is required to pay districts which com- 
ply with the laws the following per cent of salary costs : First-class 
districts, 25 per cent; second and third class districts, 35 per cent; 
fourth-class districts, 50 per cent. 

Texas in 1919 provided for an annual appropriation of $2,000,000 
to aid rural districts. The Texas Legislature of 1923 appropriated 
$3,000,000 from the general revenue to supplement the State school 
fund. This will increase the per capita apportionment based upon 
pupils between the ages of 7 and 18 from $10 to $13. 

Utah in 1920 adopted a constitutional amendment which permits 
a State school tax sufficient to provide annually an amount which, 
added to other State funds, will provide a sum equal to $25 per 
school child. In the same year the State of Washington increased 
its State distributive fund from $10 to $20 per child of school age. 
The result of this was to increase the portion of total school costs 
borne by the State from 18 per cent in 1920 to 25 per cent in 1922. 



18 BIEITNIAL, SURVEY OF EDUCATION, 1920-1922. 

Probably the most marked departure from traditional policies is 
to be found in Massachusetts. Possibly no other State pursued 
so long and so completely the policy of placing almost the entire 
burden of school support upon the local communities. The convic- 
tion that the State should assume little or no responsibility either 
for the direction or for the support of schools prevented Massachu- 
setts from establishing a State permanent school fund until 1834. 
In 1915 Alabama, Mississippi, Montana, Delaware, Texas, and Ken- 
tucky each derived less than 50 per cent of their common-school 
revenues from the proceeds of local taxation; Massachusetts in the 
same year derived 97.2 per cent of her total school revenue from local 
taxation. In this form of support she long surpassed all other States 
in the Union. Again, Massachusetts leads the Union in the antiquity 
of this practice. Whereas local taxation for school support was not 
allowed in some States until well-nigh into the nineteenth century, 
and in some others, notably Alabama, not until the twentieth cen- 
tury (1901), Massachusetts permitted it as early as 1647 and in 1827 
made it compulsory. 

In the year 1919 Massachusetts frankly recognized the necessity 
of reversing her century-long policy and of placing upon the State 
a much larger share of school costs than in the past. This recogni- 
tion was given practical expression by the passage of a law provid- 
ing for the setting aside of a portion of the proceeds of the State 
income tax (created in 1916) as an annual current fund to be known 
as the general school fund. As the result of this legislation, 
whereas in 1915 the State had furnished only 1.82 per cent of the 
total public-school revenues, in 1920 she furnished no less than 12.3 
per cent, and in 1921, 11.3 per cent. The creation of the Massa- 
chusetts general school fund was a definite recognition of a number 
of principles of far-reaching significance: (1) That the State must 
assume a much larger share of responsibility for equalizing school 
burdens and educational opportunities than in the past; (2) that 
this would necessitate the State providing a much larger share of the 
total school revenue than formerly; (3) that former sources of 
revenue were inadequate and that new sources must be found; (4) 
that a graduated State tax on personal incomes is an important and 
valid source of public-school revenue.^ 

In creating her general school fund Massachusetts was careful 
not to provide a fixed amount. On the contrary, the law requires 
that there shall be annualf^^ set aside from the proceeds of the State 
income tax an amount sufficient to subsidize the projects set forth 
in the act. In the year 1918 the State contributed $1,113,000 toward 

2 For a full account of tlie Massachusetts general school fund, see Swift, F. H. " Public 
School Finance in Massachusetts," " Studies in Public School Finance, The East," 
Vol. II, University of Minnesota, Research Publications. 



PUBLIC SCHOOL. FUsTANCE. 19 

the support of public schools. In 1921 the general school fund 
alone contributed $4,165,000, and the total amount contributed by the 
State for public schools, including vocational schools, was $6,035,000. 
The income of the general school fund is to be used exclusively for 
the payment of salaries of superintendents, assistant superintendents, 
principals, supervisors, and teachers. The entire sum is paid out to 
the cities and towns of Massachusetts in reimbursements ranging 
from $350 to $150 for each school officer for whom the town or city 
is entitled to reimbursement from this fund. 

A NEW CONCEPTION OF STATE AID. 

A study of the history of school finance in the United States will 
reveal the number of different conceptions as to the purposes of 
State aid. The first State to create a permanent common-school 
fund was Connecticut, which did so in 1795. There is reason to 
believe that from the first the expectation in the minds of the legis- 
lators of Connecticut in establishing this fund was that the revenue 
should pay in full the wages of common-school teachers and so relieve 
the towns and school societies almost entirely from local taxation. 
The results of the Connecticut policy by which the responsibility 
of supporting schools was removed almost entirely from the local 
communities and thrown back upon the State could not have been 
foreseen by those who inaugurated this policy. Nevertheless, the 
evils soon showed themselves, and the school fund of Connecticut 
became notorious as an example of a magnificent endowment creat- 
ing educational disaster. Of all the ills that followed the establish- 
ment of the Connecticut school fund, the most disastrous was its 
effect upon local taxation. The Connecticut School Code of 1700, 
which had continued in force until 1798, compelled every town to 
levy a local tax. The gradual increase of the income of the school 
fund was accompanied by an increase in disinclination to levy 
taxes, with the result that from 1821 to 1854 a local school tax was 
virtually unknown in Connecticut. 

The lesson which Connecticut had learned at such a cost was not 
lost upon the other Eastern States. New York passed an act in 1812, 
three years prior to the first distribution of the revenue of her per- 
manent common-school fund, requiring that in order to participate 
in the income of this fund the local community must raise by tax 
an amount equal to its share of the State fund. From this time on 
in a considerable number of the States the purpose of State aid was 
conceived to be twofold: First, to ease the burden of local com- 
munities; second, to stimulate local effort. In general. State aid 
was distributed among counties and districts on the basis of total 
population or school population. No attempt was made to recog- 



20 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

nize differences in the ability of various communities to provide 
school revenues as represented by differences in valuation, or to 
recognize differences in effort as represented by differences in local 
school-tax rates. During the past few years, however, numerous 
reports and studies have pointed out the supreme importance of 
these factors, with the result that there has come into prominence a 
new conception of the fundamental purpose of State aid, namely, 
that of evening out the inequalities in school revenues and school 
opportunities existing among the various communities of the State 
and which in the last analysis are due to factors which the local 
communities frequently are unable to modify. As the result of this 
new conception, we find one State after another attempting to 
establish a State equalization fund or providing for the distribution 
of already existing funds upon a basis which will take into con- 
sideration differences in valuation and in tax rates — that is, differ- 
ences in ability, need, and effort. 

A few examples of this tendency must suffice. As long ago as 
1913 Colorado provided for setting aside out of the income of her 
public-school fund a sum not to exceed $60,000, to be paid to dis- 
tricts unable to derive from all other State, county, and district 
revenues a sum sufficient to pay each teacher employed in the dis- 
trict at least $50 per month for six months. In 1919 the amount to 
be set aside from the income of the public-school fund was increased 
to $150,000. In 1921 an act was passed which provides that the 
State superintendent of public instruction before apportioning any 
of the income of the public-school fund shall first apportion to any 
county in the State in which the maximum rate of county-school tax 
(5 mills) shall be insufficient to provide funds to pay every public- 
school teacher within that county a minimum salary of $75 a month, 
a sum sufficient to supply the amount of such deficiency. It will be 
seen that this act makes the entire income of the public-school fund 
available as an equalization fund, should the occasion arise. 

It was in 1921 that the State of Maine passed a law providing that 
$100,000 should be deducted annually from the State school fund 
to be used as a State equalization fund. The equalization fund is ap- 
portioned first for the sake of aiding towns whose aggregate attend- 
ance is small and which consequently will receive a small amount of 
help from that portion of the State school fund distributed on the 
basis of aggregate attendance. Whenever any school maintained by 
a town for the number of weeks of school provided for in said town 
fails to record at least 1,500 days' aggregate attendance, there shall 
be apportioned to the said town from the State equalization fund 
such sum as will give to said town an amount equal to that appor- 
tioned for 1,500 days' aggregate attendance. The State superintend- 



PUBLIC SCHOOL FINANCE. 21 

ent of public instruction is allowed to grant to any town a sum not 
exceeding $500 in any one year for the encouragement of consolida- 
tion, conveyance of pupils, housing of teachers, standardization of 
schools, or other projects especially worthy of encouragement. The 
State equalization fund may be used to provide special aid for a 
school which has been closed because of an epidemic, a fire, or 
other unpreventable causes and which on account of such reasons 
would not receive the amount of State aid from the State school 
fund to which it would otherwise have been entitled. The balance 
of the school equalization fund not apportioned as provided for by 
the preceding provisions shall be apportioned to towns wherein the 
rate of taxation is considerably in excess of the State average rate 
yet fails to produce a school revenue sufficient to secure a reasonable 
standard of educational efficiency. 

In 1921 the State of Michigan passed an act providing for State 
grants designed to equalize school burdens. This act grants $200 
of State aid annually to any " primary school district " maintaining 
a one-room school nine months if its school maintenance tax for a 
seven months' school is 12 mills or more. A special appropriation 
is made to provide for the funds to carry out the provisions of this 
act. 

In 1921 the Legislature of Minnesota passed an act which pro- 
vided for an equalization fund referred to in the act as supplemental 
aid. This act provided that to any school district whose school 
maintenance tax lies between 20 and 32 mills the State shall pay as 
supplemental aid one-third of the excess above 20 mills. If the tax 
levy for maintenance exceeds 32 mills, then in addition to the above 
amount the State shall pay one-half of such excess above 32 mills. 
In school districts maintaining only ungraded elementary schools, if 
a 20-mill tax does not raise the equivalent of $600 for each teacher 
employed at least seven months, then the State board of education 
may grant to such school district an amount which, together with the 
proceeds of a 20-mill tax, will provide $600 for each teacher em- 
ployed. The Minnesota Legislature of 1923 passed an act providing 
that supplemental aid shall be limited to school districts whose local 
maintenance levy exceeds 20 mills. When a local school tax of 20 
mills fails to yield the equivalent of $40 per pupil in attendance 40 
days, the State pays the difference between the sum per pupil pro- 
duced by the 20-mill tax and $40 per pupil. The effect of this act is 
to establish the fund for supplemental aid as an equalization fund. 

In 1920 Mississippi enacted two exceedingly important laws — a 
compulsory attendance law and a law providing for an increase in 
State appropriations. The State superintendent of public instruc- 
tion states that the new compulsory attendance law resulted in bring- 



22 BIENNIAL. SURVEY OF EDUCATION, 1920-1922. 

ing into school 33,186 white children over 7 years of age who had 
never been to school before and that — 

The common-school appropriation (through legislation of 1920) was increased 
60 per cent and all the increase put into an equalization fund to be disbursed 
by the State board of education in such a manner as to equalize as nearly as 
possible school terms and teachers' salaries throughout the State. 

REFORMS IN APPORTIONING STATE SCHOOL FUNDS. 

Scarcely less important than the provision of adequate revenue 
is the apportionment of such revenue in accordance with methods 
which may be characterized as scientific, sound, equitable, and demo- 
cratic. Regarding no problem in school finance is the public at 
large more in need of information. In no phase of school finance 
has progress been more slow and the practices most commonly 
employed more unscientific and less necessary. 

A recent study showed that in no less than 37 of the 48 States 
school funds were distributed all or in part on the basis of school 
population, despite the fact that the unsoundness of this basis and 
the disastrous results produced thereby have been pointed out again 
and again. One of the most important purposes of State aid is to 
even out inequalities which arise among school units as the result of 
differences in wealth ; that is, differences in ability to provide money 
for schools. A bad method of distributing State aid, instead of 
evening out such inequalities, creates, exaggerates, and perpetuates 
them. Many States in the Union by adopting a scientific method of 
distributing State aid could bring about immeasurable improvement 
in educational conditions without increasing State aid a single 
dollar. One of the most hopeful signs of the present era is a grow- 
ing attempt on the part of the States to reform existing methods of 
apportioning State funds. It is evident that the creation of a State 
equalization fund is in itself an effort in this direction. In addition 
to the establishment of such funds a number of States have under- 
taken the adoption of new methods and new bases of apportioning 
the income of their permanent public school endowment funds, the 
proceeds of a State tax, or some other general State fund. 

In 1921 Maine passed a new law providing for a State school 
fund and for a new method of apportioning the same. Reference 
has already been made to the provision setting aside $100,000 of 
this annual fund as an equalization fund. The major portion of 
the State school fund is distributed on a threefold basis: (1) To 
every town is granted $100 for each full-time teaching position in 
elementary schools and secondary schools; (2) $3 for each person 
included in the town's school census (5 to 21 years of age) ; (3) the 
amount available to the towns on the basis of aggregate attendance 



PUBUC SCHOOL Fii^rAisrcE. 23 

in elementary and secondary schools. It will be seen that this law 
recognizes that the chief factor in public school support is the in- 
dividual teacher, and the State assumes the responsibility of guaran- 
teeing a definite amount for each teaching position in the State. 
Aggregate days' attendance is likewise a basis which has many 
things in its favor. Nothing can be said, however, in defense of 
distributing any part of State aid on the school census basis. The 
method by which Maine provided in 1921 for distributing the major 
portion of the State school fund, however much of an improvement 
over methods previously employed, fails utterly to take into con- 
sideration the comparative ability and the comparative effort of the 
local school units to furnish funds. 

In 1921 New Hampshire increased State appropriations for aid 
to public schools from $255,000 to $325,000. State aid from this 
fund is distributed upon the basis of the ratio of elementary-school 
expenses to equalized valuation rather than to the inventory valua- 
tion as had heretofore been done. The superintendent of public 
instruction writes: 

This change was an equitable and highly salutary one. The equalized valua- 
tion represents the actual wealth of the district so far as this can be reached 
by taxation. 

California makes the teacher the chief basis for distributing the 
major portion of State aid. By a law passed in 1921 the State pro- 
vides $30 for every elementary and every high-school pupil in aver- 
age daily attendance. California maintains two distinct funds — ^the 
State school fund for elementary schools and the State high-school 
fund for secondary schools. By a law passed in 1921 the State ele- 
mentary-school fund is apportioned as follows: $700 is paid for 
every elementary teacher, and the remainder of the fund is appor- 
tioned on the basis of average daily attendance. This money must 
be matched by the county, with the result that there is guaranteed 
for each full-time elementary teaching position $1,400 a year. In 
1921 California not only doubled the amount of State aid to be pro- 
vided by the State per pupil but adopted an entirely new method 
of apportioning her State high-school fund. The method provided 
by the law of 1921 recognizes three bases: (1) Flat quotas; (2) 
quotas for attendance in evening high schools, in special day and 
evening classes, and in part-time schools; (3) average attendance. 
A certain flat sum goes to every day high school, whether a four- 
year, a junior, or a senior high school, on the basis of the number 
of years of work it offers. In addition to this flat appropriation, 
each high school receives grants for units of average daily attendance, 
the amount per unit' decreasing as the number of units increases. 



24 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

New York and Massachusetts are two States wliicli through 
recent legislation have undertaken to give definite recognition to 
differences in local valuations. . By a law passed in 1920 New York 
provided that in addition to its regular district quota each district 
employing more than one teacher shall receive $250 for each full- 
time teacher. Districts having one teacher only with a property 
valuation of $100,000 shall receive a quota of $200. Districts having 
only one teacher and with a property valuation of less than $100,000 
shall receive a quota of $200 and $2 for each entire $1,000 that the 
assessed valuation is less than $100,000. 

It is to be regretted that space does not permit a detailed con- 
sideration of the methods employed by Massachusetts in distributing 
various State funds. It is probable that no other State in the 
Union has been so ready to experiment with new methods and new 
bases of apportioning school moneys. Prior to 1904 Massachusetts 
had changed her method of apportioning school moneys no less than 
13 times. The law passed in 1919, creating the general school fund, 
also provided for a new method of distributing the income of the 
permanent school fund. As a result of this readiness to experiment, 
Massachusetts has evolved methods of apportioning State school 
funds which, whatever their defects may be, are from the stand- 
point of the scientific soundness of the principles they seek to 
recognize immeasurably superior to those of most of the States. 
Massachusetts is one of the few States which takes into considera- 
tion, in distributing State aid, the assessed valuation and the rate 
of taxation of the receiving unit. It must not be inferred that 
Massachusetts recognizes these two exceedingly important factors 
in distributing all State funds, for she does not. Nevertheless, she 
gives far greater recognition to them than the writer has found 
in any other of the 14 States he has thus far studied. 

Massachusetts limits the income of her permanent school fund, the 
Massachusetts school fund, to towns whose valuation is 'less than 
$2,500,000. The quota granted to any town is determined by two 
factors: (1) The town's total valuation; (2) the excess of its ex- 
penditure for certain public school costs over its quota from the 
general school fund, measured or equated in terms of tax rate. In 
distributing this fund towns are divided into three classes on the 
basis of valuation limits as follows: Towns having a valuation of 
(1) less than $500,000; (2) from $500,000 to $1,000,000; (3) from 
$1,000,000 to $2,500,000. The aid is distributed in a manner designed 
to give the larger quotas to the towns of lower valuations and to 
the towns expending most in proportion to their ability. 

The general school fund derived from the proceeds of the State 
income tax is distributed among all the towns and cities of the State 
in the form of reimbursements for teachers' salaries. The quotas 



PUBLIC SCHOOL FINANCE. 25 

of the fund are paid out in tAvo installments, from the first of which 
are paid what for convenience may be called the ordinary reim- 
bursements; from the second installment are paid what may be 
called supplementary reimbursements. Ordinary reimbursements 
are paid in the form of definite quotas for each teacher or other 
school officer employed. In the distribution of ordinary reimburse- 
ments no recognition is given to the valuation or to the local tax 
rate of the receiving unit. The amount is determined solely upon 
the basis of whether the school officer was employed for full time or 
part time, his professional training, years of experience, and salary 
received from the town or city. On the other hand, supplementary 
reimbursements are paid on the basis of the community's assessed 
valuation per pupil. A study of the legislation passed by Massa- 
chusetts 1919-1922 will show that this State is committed to the 
following principles: (1) State aid should be given in the form of 
reimbursements for money previously expended; (2) the amount 
of State aid granted shall be determined by (a) the conmiunity's 
ability ta help itself as indicated by its assessed valuation, (&) the 
community's effort as indicated by its local tax rate, (c) the quality 
of educational opportunity the community seeks to furnish as indi- 
cated by the number and preparation of teachers and the character 
of the educational facilities provided. 

NEED OF NEW SOURCES OF REVENUE. 

There are a number of reasons which have forced the States to 
seek to discover new sources of school revenue. First and foremost 
is the increasing cost of public education and the inadequacy of 
existing sources to meet these costs; second, a growing recognition 
of the unsoundness of the general property tax which long has 
been and still remains the most important source of both State and 
local revenues. To these two reasons must be added a third, namely, 
that with the increase in school costs and revenues provided, per- 
manent State endowments for common schools which at one time 
afforded important relief to the local communities have steadily 
declined in relative importance until to-day in the majority of the 
States these funds are of well-nigh negligible importance, viewed 
from the standpoint of the proportion of total revenue which they 
provide. 

DECLINING IMPORTANCE OF STATE ENDOWMENTS. 

In 1890 the public schools of the United States derived 5.45 per 
cent of all school receipts from the income of permanent school 
funds and lands; in 1905, 4.37 per cent; and in 1920, 2.7 per cent. 
From this we see that the proportion of total school receipts de- 
rived from permanent funds in 1920 was only half of what it was 



26 BIENNIAL. SURVEY OF EDUCATION, 1920-1922. 

in 1890. The significance of this fact can not be fully appreciated 
unless we recall that, except for the admission of a number of new 
Western States with vast endowments for public schools, the per 
cent of total school receipts derived from permanent funds would 
have declined even more rapidly than it did. 

The five States which derived the highest per cent of their total 
revenue from permanent funds in the year 1905 are Wyoming, 
Nevada, Texas, Utah, and Oregon. Perhaps there is no better means 
of coming to an appreciation of the decline in the importance of 
permanent school funds as sources of revenue than by comparing 
the per cent of total revenue derived from permanent funds in these 
States during the years 1905 and 1920. 

Table 3. — Five States ranking highest in per cent of total revenue derived 
from permanent funds in 1905. 



Approximate per cent 
oftotalschoolrevenue 
derived from income 
of permanent school 
funds and endow- 
ments. 



1905 



Wyoming 

Nevada (1906). 

Texas 

Utah (1904)... 
Oregon 



49.30 
49.19 
27.69 
21.20 
13.53 



23.8 
11.3 
13.6 
4.6 

4.2 



From the above table we see that, whereas Wyoming and Nevada 
each derived nearly half of their total receipts for public schools 
from their respective permanent common school funds in 1905, 
Wyoming derived less than one-fourth from this source in 1920, and 
Nevada slightly more than one-tenth. In Texas permanent funds 
contributed more than one-fourth of the total school revenue in 1905, 
but less than half this proportion in 1920. In Utah permanent 
funds were five times as important as a source of revenue in 1904 as 
in 1920, and in Oregon approximately three times as important in 
1905 as in 1920. 

From this account of the declining importance of what was at one 
time in many a State not only the most important but the sole source 
of State school revenue, let us turn our attention to some of the 
newer types of State sources. 

NEW SOURCES OF STATE SCHOOL REVENUE. 

Of the new sources established by States to provide school rev- 
enues perhaps the most significant are the following: Corporation 
taxes, income taxes, inheritance taxes, occupation taxes, and sever- 
ance taxes. 



PUBLIC SCHOOL FINANCE. 27 

Corporation taxes. — New Hampshire, Maine, Kentucky, New 
Jersey, Virginia, and California are among the States which to- 
day depend for a portion of State school moneys upon the proceeds 
of State corporation taxes. California has applied this policy more 
widely than any other State, and may therefore be taken as an ex- 
ample of this important trend in school finance. 

As the outcome of a tax-reform movement beginning at least as 
far back as 1894, California adopted in 1910 an amendment pro- 
viding for the levying of a State corporation tax. This tax is levied 
on all corporations, the rate varying according to the type of cor- 
poration. In 1920 the State provided approximately 14 per cent of 
the entire moneys devoted to public schools. The major portion of 
this aid consisted of appropriations paid from the State general 
fund. Approximately 60 per cent of the general fund was derived 
from corporation taxes. 

. Severance taxes. — ^An epoch-making event in the history of school 
finance was the enactment by the State of Louisiana on July 1, 1920, 
of a law providing for a severance tax which places a tax on all 
natural products severed from the soil except agricultural products. 
A number of States, such as Utah and Minnesota, have long levied 
taxes upon ores, but a severance tax takes not only ores but timber, 
sand, gravel, clay, gas, oil, and all other nonagricultural natural 
products. The proceeds of this tax in Louisiana are devoted in part 
to the State university and the agricultural and mechanical college, 
and in part to State institutions for the deaf, blind, and other special 
classes. None of the proceeds goes to public schools; nevertheless, 
as a type of taxation it is of great significance and will perhaps 
prove very suggestive to many other States looking for new sources 
of school revenue. It is estimated that the Louisiana State Uni- 
versity will receive annually from the severance tax between a 
million and a half and two million dollars. It is interesting to note 
in this connection that, in accordance with the recommendations 
contained in a survey of public education in Arkansas made by the 
United States Bureau of Education, the Arkansas Legislature of 
1923 enacted laws providing for a State income tax and a State 
severance tax. 

Income tojxes. — ^An earlier portion of the present account has 
described at length the action of Massachusetts in 1919 by which she 
created a general school fund by setting apart a portion of the pro- 
ceeds of the State income tax. We have also noted the inauguration 
of this policy by the Arkansas Legislature of 1923. Delaware is 
^another State which in comparatively recent times has had recourse 
to a State income tax as an important means of providing State 
revenue for schools. 



28 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

Inheritance taxes. — ^A study made in 1920 revealed the fact that 
at least five States — California, Delaware, Kentucky, Louisiana, and 
Virginia — were then devoting to schools moneys derived from taxes 
on inheritances. In 1923 Montana was added to this group through 
the passage of a law which provided that 50 per cent of the pro- 
ceeds of inheritance taxes should be devoted to schools. 

Occupation taxes. — In 1921 a law was passed by the State of 
Minnesota designed to do away with the practice of taxing iron 
ore on a tonnage basis and to substitute therefor a 6 per cent occu- 
pation tax on net profits. The constitutionality of this law was up- 
held by the United States Supreme Court and thus the right of the 
State to impose an occupation tax was established. At the present 
writing it is claimed that the mining companies of the State owe 
the State of Minnesota no less than $5,000,000 in back taxes. Fifty 
per cent of the proceeds of the Minnesota occupation tax will be 
added to the general revenue fund, 40 per cent to the permanent 
school fund, and 10 per cent to the permanent university fund. The 
tonnage-tax law provides a 10 per cent penalty if payment is not 
made by June 1 of the following year. 

Miscellaneous. — Certain States have provided that the proceeds of 
a tax upon special commodities or products shall be devoted to 
schools. Thus in 1921 Montana enacted a law providing that one- 
third of the proceeds of taxes on gasoline should be apportioned to 
public schools. 

We have now discussed the most important developments and 
tendencies in State school finance during the biennium 1920-1922. 
It is to be regretted that space does not permit recounting a number 
of others. One at least should be mentioned, namely, the tendency 
to enact State laws prohibiting local communities from establishing 
sinking funds for the purpose of paying the interest and principal 
of bond issues. Such laws require that in the future bonds shall 
be issued in series and a tax levied sufficient to meet payments of 
interest and principal. Massachusetts and New Jersey are among 
the States which have recently enacted legislation of this charac- 
ter. The Massachusetts law provides that no further sinking funds 
for the payment of debts shall be established by any district, town, or 
city, except Boston, but that such debts shall be paid by such annual 
installments as shall extinguish the same at maturity. The law 
further requires the levying of an annual tax sufficient to meet all 
principal and interest bond obligations. 

TENDENCIES IN LOCAL SUPPORT— COUNTY AND DISTRICT. 

In 1890, of the total receipts for public schools in the United 
States, 68 per cent was derived from local sources. In 1920 slightly 



PUBLIC SCHOOL FHiTANCE. 29 

more than 83 per cent.^ Although there has been an increase in the 
proportion of the total school revenue furnished by local sources in 
nearly every State in the Union, with a few striking exceptions, such 
as Massachusetts already noted, the most striking increase has been 
in the South Central and South Atlantic States, where in 1890 of the 
total receipts 50 per cent or less than 60 per cent was provided 
by local units. In 1890 the per cent of total public school receipts 
derived from local sources was, in North Carolina 2; South Caro- 
line 13, Tennessee 13, Texas 12. In 1920 North Carolina derived 
70 per cent of her total public-school revenue from local sources; 
South Carolina 84 per cent; Tennessee, 82 per cent; and Texas, 
46 per cent. A study of the situation in Alabama, Arkansas, Georgia, 
Kentucky, Louisiana, and Mississippi shows increases varying from 
15 to 30 per cent. 

Wliether we view the United States as a whole or individual 
States, we discover that, despite a certain degree of progress in mat- 
ters of centralization, and despite the utterances of educational the- 
orists and court decisions to the effect that public schools are State, 
not local, institutions, in actual practice schools in the United States 
have tended throughout the last quarter of a century to become more 
and more locally supported. 

The results of this tendency are being felt to-day as never before. 
From almost every State come reports of inadequate funds for the 
support of public schools and accounts of frantic attempts to cut, 
in the name of economy, teachers' wages and to reduce school curri- 
cula to the narrow, arid state of generations gone. The majority of 
the States are to-day financing their schools under the district sys- 
tem. The story of this system wherever found is the same : Inequal- 
ities in ability to produce school revenue, inequalities in effort and 
zeal, inequalities in educational opportunities. 

It is a realization of the unfairness of existing systems of local 
support and local control and the disastrous and incurable evils pro- 
duced by such systems that has led many scientific students of edu- 
cation and several of the States to give serious consideration to the 
possibilities of deriving a much larger proportion of school revenues 
from units more capable than school districts of equalizing school 
revenues, burdens, and opportunities. Those looking for a solu- 
tion have turned their attention to the Nation, the State, and to 
larger local units, such as the county. 

Some of the States, of which Maryland is a notable example, have 
depended upon the county as a unit of organization and school sup- 
port from the very beginning of their statehood. Nevertheless, 

s 83.2 per cent, consisting of 11.4 per cent from county sources and 71.8 per cent from 
district and otlier local sources. 



30 BIENNIAL, SURVEY OF EDUCATION, 1920-1922. 

a widespread recognition of tlie significance of the county as a 
source of school revenue is of comparatively recent development. 
The truth of this statement is suggested by the fact that the analy- 
ses of the public-school revenues prepared by the United States 
Bureau of Education for the years prior to 1918 did not report 
county school receipts separately, but simply included them under 
the general caption, " Local receipts," 

Another fact pointing to the rising importance of the county in 
the support of public schools is found in the fact that, whereas in 
1918 only 7.9 per cent of the total school receipts were provided 
from county sources, in 1920 the proportion contributed by the 
county had increased to 11.4 per cent. During this biennial period 
the increase in certain States was exceedingly marked. Of 17 States 
deriving 15 per cent or more than 15 per cent of their school reve- 
nues from county funds in 1920, in only two, Arizona and New 
Mexico, was the proportion less than in 1918. In all others the 
proportion remained the same or was greatly increased. The most 
notable increases were in Kentucky, Oregon, Ohio, North Carolina, 
Nevada, Louisiana, and Mississippi. Among these States the 
smallest increase was in Kentucky, where in 1918 the county con- 
tributed 17 per cent of the total school revenue and 25 per cent in 
1920. The greatest increase was in Ohio, where in 1918 the county 
contributed only 1.7 per cent and 54 per cent in 1920. 

Evidences are not' lacking that the tendency already observed dur- 
ing the biennium 1918-1920 for the county to become an increasingly 
important source of school revenue continued throughout the bien- 
nium 1920-1922. A constitutional amendment adopted by Georgia in 
1920 permitted each county to levy, on the recommendation of the 
State board of education, a county school tax of not less than 1 nor 
more than 5 mills. As the result of this law, half of the counties in 
the State were required in 1921 for the first time in their history to 
levy a local school tax. The total expenditure for public schools in 
Georgia increased from $11,900,000 in 1920 to $14,500,000 in 1921. 

Not only in the South and Middle West, but in the West as well, 
has the county grown in importance during the last biennium. In 
California under the law of 1919 every county was required to levy 
an elementary county school tax sufficient to provide a sum equivalent 
to $21 per pupil in average daily attendance. In 1921 an act was 
passed increasing the tax to a rate sufficient to provide at least $30 
per pupil, or $700 per teacher employed, in case the sum estimated 
on this basis exceeds the sum required to furnish $21 per pupil. 
Under the law of 1919 a limit of 5 mills was placed upon county 
taxation ; the law of 1921 fails to state any limit and, by this failure, 
removes all limits. The county is required further to levy a tax 
sufficient to provide $60 per high-school pupil in average daily at- 



PUBLIC SCHOOL FINANCE, 31 

tendance and to provide for reimbursements to all high-school dis- 
tricts within the county for money expended for transportation of 
pupils living in territory in the county not included in any high- 
school district and further reimbursements to all high-school districts 
for textbooks furnished free to pupils residing in portions of the 
county not included in a high-school district. 

By an act passed May 27, 1921, California provided for the organi- 
zation of junior college districts and for the maintenance of junior 
colleges therein. In each county wherein there is not a county 
junior college a special tax upon all taxable property within the 
county must be levied. This tax must be sufficient to defray the cost 
of educating for the current year students attending a junior college 
in an adjoining county. 

The most important recent tendencies in district school support 
are the increasing of the limits of local taxation and bonding limits 
and the requiring of the preparation of budgets to be approved by 
higher educational authorities. 

Preceding paragraphs have noted the declining importance of 
the State as a source of school revenue. It is scarcely necessary 
to note that this declining importance of State sources has been 
paralleled by an increase in the importance of local sources. Thus, 
whereas in 1890 approximately 68 per cent of the total receipts for 
public schools in the United States was furnished by local sources, 
in 1920 nearly 72 per cent was thus provided, excluding county 
revenues. No one conversant with the facts would question the state- 
ment that the tremendous increase in school revenues in the 
United States during the past 25 years has been due chiefly to the 
increase in the efforts put forth by the local school units. Practice 
varies widely with respect to the authority and responsibility which 
the various States delegate to their local school units in the matter 
of raising school revenues. Massachusetts and California, two States 
which without question belong in the highest rank educationally, 
have no limits as to rates of local school tax. Arkansas, on the 
contrary, fixes the maximum district tax at 12 mills, with the 
result that rates in this State vary all the way from to 12 mills. 
The impossibility of maintaining schools from the proceeds of taxes 
levied under existing rates has led a number of States during the 
biennium to endeavor to have these limits raised or removed en- 
tirely. The same tendency is visible with respect to limits of in- 
debtedness. 

THE PRESENT SITUATION. 

Despite the vast increase in school funds which the present ac- 
count has recorded, despite also the progress which has been made in 



32 BIEKNIAL, SURVEY OF EDUCATION, 1920-1922. 

establishing new sources and in apportioning State aid in a more 
just, scientific, and efficient manner than formerly, the educational 
situation with which the United States is confronted at the close of 
the year 1922 leaves much to be desired. It makes little difference 
to what section of the country we turn our attention, in nearly every 
quarter the story is one of inadequate teachers' salaries, inadequate 
buildings, inadequate revenues, glaring and ominous inequalities in 
educational opportunities. We are informed that never in the his- 
tory of New York City has the proportion of children attending 
school on part time been so large. Again, we learn "that the high- 
school situation in Boston has never been as bad as at present." In 
1920 the annual cost per pupil in average daily attendance for the 
United States as a whole* was approximately $64, yet in 1922 the 
annual cost per pupil in average daily attendance in Tennessee rural 
elementary schools ^ varied all the way from $39 to $7. In 1921 in 
Arkansas ^ the highest average county expenditure per pupil enrolled 
was $31, the median expenditure was $10 per year, and the lowest, $6. 

There never was a time in the history of American education when 
there was a greater need for sane and scientific leadership. Through- 
out the breadth and length of the United States to-day city. State, 
and National organizations and commissions are working with a 
zeal and devotion unsurpassed. On the one hand we hear the cry 
that public education has exceeded all legitimate bounds and that 
the public schools must retrench. This cry is met on every hand by 
the carefully worked out and intelligent findings of scientific 
students who are at one in declaring that school facilities must not 
be lessened but immeasurably increased. These students point out 
that increases in school costs have been accompanied all along the 
line by vast increases in national income and that the situation we 
are now confronting is not one which should arouse fear but rather 
one which should urge us to a scientific study of the sources and dis- 
tribution of school revenues. 

Dr. Edwin R. Seligman, of Columbia University, outstanding 
national authority in political economy, declares that — 

While it is true that the educational budget has increased more rapidly than 
the population, it is not true that it has increased more rapidly than the wealth 
of the community. On the contrary, it may be affirmed with little fear of con- 
tradiction that, from the economist's point of view, tlie growth of prosperity in 
the United States as a whole has been so enormous as to make th.e proportion of 
educational expendittires to real wealth of the community actually smaller 
than it was in past decades. 

* Bu. of Educ, Bui., 1922, No. 29, p. 44, Table 27. This amount is the sum of columns 
12 and 13. 

5 Tenn. Supt. of Pub. Instniction Rep., 1921-22, pp. 48-49 ; Hamilton County, $39.47 ; 
Hancock County, $7. 

« Swift,, F. H., The Public School System of Arkansas, Part II. Public School Finance, 
p. 13, Table 10 ; county expenditures, Pulasti, $30,54 ; Hempstead, $10.21 ; Stone, $6.24. 



PUBLIC SCHOOL FINAI^CE. 33 

It is the writer's belief, based upon a first-hand study of nearly 
one-third of the States, that there is not a State in the Union which, 
if it were to adopt a sound and scientific system of financing educa- 
tion, would not be able to place adequate educational facilities within 
the reach of every school child and to maintain a complete free 
system of public education from the kindergarten to the State uni- 
versity. It is necessary to acknowledge with regret that such a con- 
dition is not to be found. Not only do the schools in a number of 
the States depend for a considerable portion of their revenues upon 
pupils' tuition fees and gifts of patrons, but throughout the breadth 
and length of our land there are many school districts which levy 
no tax whatsoever and maintain no schools. 

This situation is found not only in the poorer States but in the 
prosperous Middle West. It is unnecessary here to dwell at length 
upon the policies through which reforms must be inaugurated and 
educational opportunities and the burden of school support equalized, 
for these have been set forth in a number of bulletins recently pub- 
lished by the Bureau of Education as well as in private publications.'^ 
It may be well to note, however, that the greatest obstacles at the pre- 
sent time to a sound system of school finance are the district system, 
unscientific methods of apportioning State aid, and the employment 
of the general property tax as the chief source of school revenue. 

Despite the features of the present situation just described, there 
are abundant reasons for confidence in the future. There never was a 
time when the citizens of the United States were so alive to the im- 
portance of public-school finance and to the necessity of inaugurat- 
ing reforms. Moreover, there never was a time when economists and 
educational experts were making available for the benefit of the 
public such a large amount of scientific information bearing upon the 
problems of public-school finance. The results of this public attitude 
and of the work of students of school finance are clearly discernible 
in the legislation of the last biennium. Arizona, California, Dela- 
ware, Georgia, North Carolina, Texas, Virginia, and Washington are 
a few of a growing number of States which in some cases have com- 
pletely revised their systems of school support; others have made 
important and far-reaching modifications. The financial crisis of 
which we hear on every hand is not without its compensations, for 
the pressure brought about by this crisis has forced the public to 
recognize the importance of the economic factors entering intO' the 

^ The interested reader is referred to State Policies in Public School Finance, Bu. of 
Educ, Bui., 1922, No. 2 ; The Public School System of Arkansas, Part II, Public School 
Finance, Bu. of Educ, Bui., 1923, No. 11 ; Public Education in Oklahoma, Bu. of Educ, 
1922, Ch. Ill, Problems of Financing Public Schools; Studies in PubMc School Finance, 
4 vol. University of Minnesota, Research Publications. 



34 BIENNIAL SURVEY OF EDUCATION, 1920-1922. 

maintenance of a system of public education. It is a matter of 
congratulation that the most difficult problem in the history of the 
race, that -of educating a citizenry drawn from the four quarters 
of the^earth, falls upon the richest of all nations. In this task, as 
noble as it is difficult, the United States of America need not and 
will not fail. 

o 



